OECD: Seven BEPS Actions issued September 16, 2014

COMMENT BY DR. D.N. ERASMUS – This is a summary of an article first published in a Bloomberg BNA Report available here – http://taxandaccounting.bna.com/btac/T11500/split_display.adp?fedfid=56424976&vname=tmtrnot&jd=a0f5h9x6g1&split=0

The Bloomberg BNA Report contains written extracts from the webinar presentation set out below.

www.IITF.net students are entitled to request a copy for STUDY PURPOSES only as part of the curriculum of the TJSL accredited tertiary tax course/module in the TJSL online LLM program from erasmud@tjsl.edu.

Here is the ACTUAL WEBINAR PRESENTATION on Sept. 16, 2014 – http://www.oecd.org/tax/beps-webcasts.htm

www.IITF.net will announce an update seminar to unpack the content of the 7 BEPSBEPS stands for "Base Erosion and Profit Shifting". BEPS refers to tax avoidance strategies used by multinational enterprises (MNEs) to exploit gaps and mismatches in the international tax system. By shifting profits from high-tax jurisdictions to low- or no-tax locations, MNEs reduce their overall tax burden, even if little to no economic activity occurs in the low-tax jurisdictions. These practices erode... actions announced on September 16, 2014 – if you are interested in attending this seminar please send an email to daniel@taxriskmanagement.com with your contact details and in the SUBJECT HEADING please insert “7 BEPSBEPS stands for "Base Erosion and Profit Shifting". BEPS refers to tax avoidance strategies used by multinational enterprises (MNEs) to exploit gaps and mismatches in the international tax system. By shifting profits from high-tax jurisdictions to low- or no-tax locations, MNEs reduce their overall tax burden, even if little to no economic activity occurs in the low-tax jurisdictions. These practices erode... SEMINAR”.

The has released its first set of deliverables under its Action Plan on , a project to rewrite the global tax system in order to curb the kind of that has allowed large multinational companies to pay low effective tax rates through practices such as the shifting of across borders. The organization issued more than 1,800 pages of documents comprising its work on seven action items: the digital economy, hybrid mismatch arrangements, harmful tax practices, treaty abuse, intangibles, documentation and a multilateral instrument to update the world’s network of bilateral tax treaties.

Issues Work on Seven Actions; Immediate impact on predicted

Sept. 16 — The Organization for Economic Cooperation and Development has released the first components of its comprehensive plan for creating an agreed set of international rules for fighting and ending opportunities for double non-taxation.

The Sept. 16 deliverables are the first step toward the completion of the Action Plan. The documents will be formalized as soft legislation by the when they are consolidated with the rest of the actions in 2015. The next set of deliverables is due in September 2015, and the final set in December of that year.

The plan is “a multilateral effort to tackle aggressive tax practices which erode the of countries and artificially shift profits to low- or no-tax jurisdictions.” In the OECD’s efforts to ensure that businesses do not bear the burden of , the system has left gaps and they have produced double non-taxation. The OECD are closing that loophole now through rules in the package, including rules.

Seven Deliverables

The first 7 elements of the Action Plan released Sept 16 focus on helping countries to:

BEPS Webcast – Presentation of 2014 Deliverables from OECDtax

ensure the coherence of corporate income taxation at the international level, through new model tax and treaty provisions to neutralise hybrid mismatch arrangements (Action 2);
realign taxation and relevant substance to restore the intended benefits of international standards and to prevent the abuse of tax treaties (Action 6);
assure that transfer pricingTransfer pricing is a fundamental concept in international taxation that defines the pricing methods and rules applied to transactions between related entities within a multinational enterprise (MNE). In the context of tax regulations, it governs how prices for goods, services, or intangibles (such as intellectual property) are set when these items are exchanged between different branches, subsidiaries, or affiliates of... outcomes are in line with value creation, through actions to address transfer pricing issues in the key area of intangibles (Action 8);
improve transparency for tax administrations and increase certainty and predictability for taxpayers through improved transfer pricing documentation and a template for country-by-country reporting (Action 13);
address the challenges of the digital economy (Action 1);
facilitate swift implementation of the BEPSBEPS stands for "Base Erosion and Profit Shifting". BEPS refers to tax avoidance strategies used by multinational enterprises (MNEs) to exploit gaps and mismatches in the international tax system. By shifting profits from high-tax jurisdictions to low- or no-tax locations, MNEs reduce their overall tax burden, even if little to no economic activity occurs in the low-tax jurisdictions. These practices erode... actions through a report on the feasibility of developing a multilateral instrument to amend bilateral tax treaties (Action 15); and
counter harmful tax practices (Action 5).

The OECDThe Organisation for Economic Co-operation and Development (OECD) is an international organisation comprising 38 member countries, established to foster economic growth, trade, and development on a global scale. Founded in 1961, the OECD provides a forum for governments to collaborate, share policy experiences, and develop solutions to common economic challenges. The OECD's core mission is to promote policies that improve... recommendations will be a key item on the agenda when G20 finance ministers next convene at a meeting hosted by Australia’s Finance Minister Joe Hockey on 20-21 September in Cairns, Australia.

The proposed measures were agreed after a transparent and intensive consultation process between OECDThe Organisation for Economic Co-operation and Development (OECD) is an international organisation comprising 38 member countries, established to foster economic growth, trade, and development on a global scale. Founded in 1961, the OECD provides a forum for governments to collaborate, share policy experiences, and develop solutions to common economic challenges. The OECD's core mission is to promote policies that improve..., G20 and developing countries and stakeholders from business, labour, academia and civil society organisations.

These recommendations may be impacted by decisions taken with respect to the remaining elements of the BEPSBEPS stands for "Base Erosion and Profit Shifting". BEPS refers to tax avoidance strategies used by multinational enterprises (MNEs) to exploit gaps and mismatches in the international tax system. By shifting profits from high-tax jurisdictions to low- or no-tax locations, MNEs reduce their overall tax burden, even if little to no economic activity occurs in the low-tax jurisdictions. These practices erode... Action Plan, which are scheduled to be presented to G20 Governments for final approval in 2015. At that point Governments will also address implementation measures for the Action Plan as a whole.

For further information on the OECDThe Organisation for Economic Co-operation and Development (OECD) is an international organisation comprising 38 member countries, established to foster economic growth, trade, and development on a global scale. Founded in 1961, the OECD provides a forum for governments to collaborate, share policy experiences, and develop solutions to common economic challenges. The OECD's core mission is to promote policies that improve.../G20 Base Erosion and Profit ShiftingBEPS stands for "Base Erosion and Profit Shifting". BEPS refers to tax avoidance strategies used by multinational enterprises (MNEs) to exploit gaps and mismatches in the international tax system. By shifting profits from high-tax jurisdictions to low- or no-tax locations, MNEs reduce their overall tax burden, even if little to no economic activity occurs in the low-tax jurisdictions. These practices erode... Project, including an Explanatory Statement, a background document, FAQs and the first deliverables to the G20, go to: www.oecd.org/tax/beps-2014-deliverables.htm.

Media queries should be directed to Pascal Saint-Amans, Director of the OECDThe Organisation for Economic Co-operation and Development (OECD) is an international organisation comprising 38 member countries, established to foster economic growth, trade, and development on a global scale. Founded in 1961, the OECD provides a forum for governments to collaborate, share policy experiences, and develop solutions to common economic challenges. The OECD's core mission is to promote policies that improve... Centre for Tax Policy and Administration, (+33 6 2630 4923) or the OECD Media Office (+33 1 4524 9700).

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